Outsourcing separates winners and losers: farming out non-core processes pays dividends for those who do it right.(Business Performance)

Manufacturing Business Technology, September, 2005 by Bury, Scott

Here's something you may not know about business process outsourcing, or BPO: roughly half the time it fails to deliver the anticipated benefits. That fact, uncovered in a study conducted last year by New York-based McKinsey & Co., raises the question of why outsourcing remains a popular business strategy, with analyst groups like Stamford, Conn.-based Gartner expecting companies to spend more than $133 billion on it this year alone.

The simple answer is that when outsourcing is done properly, the benefits are substantial. For instance, Forrester Research, Cambridge, Mass., estimates that most large and medium-size companies can lower the cost of supporting their IT infrastructure 20 percent to 40 percent by outsourcing that function. "Better...

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